3Sixty Restaurants to consolidate for six months, returns to profit as full-year turnover almost triples: 3Sixty Restaurants, led by James Horler, which operates Ego restaurants under a joint venture with Mitchells & Butlers (M&B), is set to consolidate for six months as the business assesses the impact of the cost of living crisis. Horler told Propel while the group has a strong pipeline of sites, “it made sense” in the current climate to wait “until early 2023” before looking to add further to the 26-strong estate. It comes as the business reported “extremely strong” results for the year ending 27 March 2022. Turnover almost tripled to £38,753,089 from £13,148,363 the year before. Adjusted Ebitda climbed to £6,476,152 from £568,085 the previous year. The business saw a pre-tax profit of £5,067,474 compared with a loss of £1,007,748 the year before. Since the year end, the business has opened the Stanney Oaks in Chester. In their report accompanying the accounts, the directors stated: “The directors are pleased with the significant progress made with the Ego brand throughout the financial year. The performance resulted in the group being in a net cash position by the year end and having no drawn debt. The group opened two new sites in the year – The Green Dragon in Lymm and The Groes Wen in Penhow – both of which traded significantly ahead of forecast. The directors are positive about the year ahead but recognise that trading may be harder as cost pressures increase. They are, however, confident that many sites will continue to mature and continue to contribute significant Ebitda. Turnover recovered strongly after the closure period and exceeded the budget for the year by a considerable amount. The group engaged very well with its 444,000 Ego Club members and this allowed it to be able to drive footfall, re-engage with loyal and regular customers and provide confidence of a strong offer of local staff serving fresh Mediterranean food and offering great value. Sales since the year end have also been good. With what is a very strong balance sheet and a clear focus on opening more Ego sites, we are in a very strong position going forward and remain cautiously optimistic about the future. Overall gross profit margin has been maintained and labour percentage decreased by 44.4% excluding the furlough grants or 0.8% including the furlough grants due to the covid-19 pandemic. The impact of covid-19 on trading makes effective comparison with the prior period difficult. The reduced VAT on food sales had a positive impact on margin. The group and company also invested £1.4m into the two new sites. During the year the group had a bank facility consisting of a revolving credit facility of £5.0m. The loan through the Coronavirus Business Interruption Loan Scheme has been fully repaid in August 2021 and the £5.0m was renewed in August 2021, which is undrawn at the date of signature of this report [11 August 2022]. Furthermore, as a direct result of the continued investment in the property estate of the company, management are confident the group’s and company’s trading prospects have benefited due to the performance noted following the lifting of the lockdown restrictions. The group and the company have come through the pandemic and trade and cash generation is better than what would have been expected. The directors are confident that the strength of the brand has been evidenced by the figures presented.” M&B formed the partnership in August 2018 when it bought sector investor Luke Johnson’s minority share in 3Sixty.

Reilley – without a commercial energy cap it’s lights out on the UK high street: Alex Reilley, executive chairman of cafe bar operator Loungers, has warned commercial utility price hikes are going to “decimate hospitality and devastate our high streets”. He said: “I’m not sure if there’s anyone bothering to govern the UK at the moment but if anyone is actually listening understand this. Commercial utility price hikes are going to decimate hospitality and devastate our high streets. National insurance and corporation tax cuts will make absolutely no difference to most businesses and whilst a VAT cut would be very welcome it doesn’t address the real issue. The government need to take the energy companies to task – it’s their excessive, opportunist greed that needs tackling. Without a commercial energy cap it’s lights out on the UK high street.”

Consumer confidence hits new low: Consumer confidence has fallen to a new record low as people facing painful budget squeezes have become “exasperated” at the state of the economy. A closely watched monthly survey of sentiment reversed a rebound in July to fall to its lowest level since records began in 1974. The index, compiled by GfK, has dropped three points this month as consumers battle runaway inflation, a growing tax burden and fail to secure wage increases in line with rising prices. “These findings point to a sense of capitulation and financial events moving far beyond the control of ordinary people,” Joe Staton, client strategy director at GfK, told The Times. “With headline after headline revealing record inflation eroding household buying power, the strain on the personal finances of many is alarming. Just making ends meet has become a nightmare and the crisis of confidence will only worsen with the darkening days of autumn and the colder months of winter.” The UK economy registered a 0.1% GDP contraction in the three months to June and will have officially fallen into recession if growth turns negative in the third quarter. All five of GfK’s sub-indices have fallen in August, including measures on future purchases, a consumer’s personal financial situation in the past 12 months and the coming 12 months. The August figures have wiped out a slight rebound in the survey measured in July. Consumer prices inflation has hit double-digits for the first time since 1980 at 10.1% and is ahead of forecasts from the Bank of England. Household energy bills will triple in October compared with April, exceeding £3,600, and could climb to £5,000 next year. The Bank expects the economy to tip into recession at the end of the year, with the downturn persisting for 15 months. Linda Ellett, UK head of consumer markets at KPMG, said households and retailers were braced for “what is looming on the horizon”. “The scale of the demand reduction remains unknown, but retailers know there will be various trade-down audiences and treat occasions,” she said. “The key to weathering this storm is to try and capture and retain those customers, from those seeking out more value products through to those swapping meals out for premium-range meals.”

Just Eat Takeaway sells iFood stake for up to €1.8bn: Just Eat Takeaway is to sell its equity stake of approximately 33% in the iFood joint venture to Prosus for up to €1.8bn. Just Eat Takeaway stated: “The transaction consideration will comprise €1.5bn in cash on closing and a deferred consideration, contingent on the performance of the online food delivery sector over the next 12 months, of up to €300m. The consideration represents an equity multiple of more than five times on the investments over the life of the joint venture. The transaction is subject to approval by the company’s extraordinary general meeting, which is expected to take place in the fourth quarter. Just Eat Takeaway remains focused on improving its profitability and on a disciplined allocation of capital. It will retain the transaction proceeds to maintain its balance sheet strength and to service repayments of its upcoming debt maturities. The company reconfirms its guidance as set out in its half year 2022 results on 3 August 2022. The management board and the supervisory board believe the transaction to be in the best interests of the company and all stakeholders. The company, together with its advisors, continues to actively explore the partial or full sale of Grubhub. There can be no certainty that any agreement with any third parties regarding Grubhub will be reached or about the timing or terms of any such agreement. Any further announcements will be made as and when appropriate.”

Average price of full English soars: The average price of a full English breakfast is said to have risen by almost a fifth in the past year. The price of making a traditional English breakfast rose by 17% in the year to July and by 1.8% in the past month alone, according to Bloomberg. Its monthly index analyses Office for National Statistics figures to track the prices of some of the main ingredients in the familiar English breakfast, including sausages, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee. The total cost of buying the ingredients rose to £31.92 last month, up from £27.93 in July 2021. The biggest monthly increase was in the price of a pint of milk, which rose by 7.3% between June and July. The cost of a pint of milk has risen by more than 40% in the past year, according to the Bloomberg index, while the costs of a 250g pack of butter and a kilogramme of tomatoes rose by 20% over the same period. The prices of coffee, bacon, butter, bread and eggs all rose by more than 2% in the last month.